GBM Resources : Report for the Quarter ended 31st December 2015

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ABN 91 124 752 745‌‌

29 January 2016

REPORT FOR THE QUARTER ENDED 31st December 2015

Highlights

Completion of the non-renounceable entitlement offer:

• The successful completion of the non-renounceable entitlement offer ('Offer'), which closed on 17 December 2015, raised a total of $1.395 million before costs of the Offer. The funds will be used to progress the evaluation and development of its 100% owned Mt Coolon Gold Project.

  
  

  Mount Coolon Gold Project:

  
  

• Eight major gold mineralising systems identified at the Mount Coolon Gold Project.
• 45 exploration prospects associated within these areas identified in a review of historical exploration data.
• GBM will continue to systematically process historical data, prioritising prospects with potential for oxide or high-grade epithermal gold mineralisation.

ASX Code: GBZ

COMPANY DIRECTORS

Peter Thompson

Managing Director/ Executive Chairman

Neil Norris

Exploration Director - Executive

Hun Seng Tan

Non- Executive Director CONTACT DETAILS

Principal & Registered Office

Suite 8, 7 The Esplanade, Mt Pleasant, WA 6153

Exploration Office

10 Parker Street,

Castlemaine, Victoria 3450

Website

www.gbmr.com.au

Email

[e-mail]

Phone

[phone]

Fax

[phone]

Phone (Exploration Office)

[phone]

Forward work program at Mt Coolon Gold Project includes:

• Commence a scoping study which will evaluate the potential to develop a heap leach gold mine based initially on oxide resources in the Eugenia and Bimurra Prospect areas.

• Additional drilling to convert part of the Bimurra exploration target (refer ASX announcement 21 September 2015) to Resource category.

• Metallurgical testwork on material from both prospects and mining studies will also be undertaken together with an overview of environmental, groundwater, cultural heritage and community matters.

• Targeting extensions at the Koala Deposit which has Indicated Resources of 205,000 tonnes grading 5.9g/t for 39,600 ounces of gold, and the Glen Eva pit which has an Indicated Resource of 132,000 tonnes grading 7.8g/t for 33,000 ounces (refer ASX announcement 27 August 2015).

SAFETY AND ENVIRONMENT

No LTI or environmental incidents were reported during the quarter. The Company has now completed 52 consecutive months with no LTI's and 98 consecutive months with no significant environmental incidents. GBM is committed to continuously improving safety and environment systems with the clear aim of achieving zero harm. Review of the company's safety management system continued throughout the quarter.

100% GBM Gold Projects

Mount Coolon Gold Project, Queensland

Following the detailed review of the gold resources at Mount Coolon last quarter and the generation of an exploration target estimate for the Bimurra prospect, GBM has continued to process and interpret the considerable volume of historic data available for the Mount Coolon project. The focus for the quarter has been to assess the exploration potential of the project area including the gold systems hosting the defined resources at Eugenia, Koala and Glen Eva.

GBM geologists have identified eight key mineralising systems which will be systematically assessed. Auriferous mineralising systems identified in the Mount Coolon Project tenements frequently contain multiple individual prospects, anomalies or targets for future exploration. Mineralising systems are located within broad north westerly trending structural corridors which have been identified as regionally significant and are considered favourable for formation of gold deposits. Key areas that have been identified are summarised and illustrated as follows:

Koala System - Centred on the high-grade Koala Gold Mine, and operated as a high-grade underground gold mine by the early pre-curser to Western Mining Corporation, Gold Mines of Australia. The total production from underground mining to 1940 was 303,408 tonnes @ 18.4g/t Au, for 179,475 ounces of gold & 60,000 ounces of silver. A further 270,000 tonnes averaging 5.6 g/t Au yielded 53,000 ounces of gold from open cut mining in the 1990's. The Koala Gold Mine currently has an underground Resource estimated at 267,000 tonnes averaging 5.7 g/t Au and containing 49,300 ounces of gold. GBM believe that drilling may not have tested the limits of mineralisation either at depth or along strike. The known mineralisation has been mined and prospected over a strike length in excess of one kilometre. In addition, a number of structural targets exist in the area nearby which hold potential to host structural repeats of the Koala Gold Mine setting.

Glen Eva Gold Mine - Yielded 37,200 ounces of gold from 154,000 tonnes averaging 7.5 g/t Au from open cut mining during the 1990's. The Deposit currently hosts a Resource estimated at 154,000 tonnes averaging 7.5 g/t Au containing 37,200 ounces of gold. This high-grade Deposit remains open at depth, and exploration along strike does not appear to have penetrated the shallow cover that obscures the extensions to the mineralisation. A number of prospects have been generated in close proximity to the Glen Eva Gold Mine by mapping, geophysical analyses and soil sampling including; Four Posts, Fence, Serpent and Arsenic Anomaly. More distal prospects include Eastern Siliceous Zone, Canadian-Blackbutt, Last Stand and Porcupine each show evidence of gold mineralisation and alteration and remain to be investigated in detail by GBM.

Eugenia System - The Eugenia Deposit Resource was recently upgraded by GBM to a total estimated Resource of 5.0 million tonnes, averaging 1.0g/t Au containing 164,000 ounces, including an oxide Resource containing

1.7 million tonnes, averaging 1.0 g/t Au and containing an estimated 53,000 ounces of gold (ASX Release dated 27 August 2015). It is considered likely that exploration completed to date has not adequately tested the system limits, or the potential for a possible high-grade feeder zone to the mineralisation. In addition, exploration by previous explorers have demonstrated gold mineralisation at prospects located in close proximity including Boundary, Boundary North and Quarry.

Bimurra Prospect - GBM have estimated an Exploration Target range for the Perseverance-Elizabeth area of the Bimurra Prospect of between 10 million tonnes at an average grade of 0.7 g/t Au, containing an estimated 230,000 ounces of gold and 4 million tonnes at an average grade of 1.2 g/t Au, containing an estimated 120,000 ounces of gold. There is also evidence of high-grade epithermal veins with intersections including a

0.5 metre interval which returned 51.5 g/t Au from 79 metres in hole DDHBIMS57( refer ASX release dated 21st

September 2015). It should be noted that the potential quantity and grade is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

In addition, the Bimurra system hosts a number of prospects and mineral occurrences with characteristics typical of low sulphidation epithermal systems. Prospects identified to date include Blenheim, Hilltop, Perseverance, Elizabeth, Bimurra east, Cap Creek, Ramillies, Bungobine Peak and Bimurra North East. The system is located on the intersection of a north west structural corridor and a north east trending corridor which hosts the 3 million ounce Wirralie Gold Mine.

Conway System - Contains multiple prospects and is considered to hold potential for both bonanza epithermal vein style deposits and bulk tonnage low grade disseminated deposits. Prospects identified by previous explorers include: Wobegong, Red Flag Hill, Quartz Reef Hill, Split Hill, Bustard Egg Hill, Mill Hill, Big Sinter Hill, and Sinter Valley. High-grade results have been reported by previous explorers including 2m @27.0 g/t Au and 2m @9.3 g/t Au at Wobegong Prospect (refer Drummond Gold Ltd. IPO Prospectus 6 November 2007). Future work by GBM will seek to verify previous drill results and include them in a database to support analyses and interpretation.

Verbena Sinter - Located 15 kilometres south east of Mount Coolon and Koala Gold Mine on the same structural corridor. The sinter outcrops over a 1.5 kilometre strike length and up to 600 metres wide. Rock chip sampling and shallow Reverse Circulation (RC) drilling have in the past confirmed the presence of gold mineralisation, but no Resource has been substantiated. It is considered possible that an improved understanding of the nature of the hydrothermal system operating at the Verbena Sinter may lead to future discovery of epithermal gold mineralisation at this prospect.

Table; Mount Coolon Gold Project Global Resource Summary August 2015. Please not rounding (1000's tonnes, 100's ounces, 0.1 g/t ) may cause minor variations to totals.

Figure: Mt Coolon Geology Map with tenement boundaries